QROPS Update 10th December 2010 Pension Foreign Exchange Report QROPS & QNUPS

We continue our daily look at factors affecting currencies allowing some insight into market conditions affecting exchange rates. Cash and income timing for UK Pensions and QROPS should be considered to maximise the Pension, QROPS and investment income and benefits taken.  

Investment market volatility and currency exchange remains a challenge. Things are still very volatile and we are in unique global influencing territory.  In conjunction with investment returns, currency exchange continues to concern many expats with UK Pensions, QROPS and now QNUPS.

Sterling predicted to be strong in 2011!

The prediction came as Barcap, the securities arm  Barclays retail bank, also used its 2011 outlook to predict that stock markets will outperform government bonds and that the US economy will stage a stronger recovery than it has managed in 2010.

The pound, which has been hard hit since the financial crisis, will end next year at $1.82 against the dollar and 78p versus the euro, it was estimated. The currency closed on Thursday in London at $1.5728 and 84p.

The UK currency's performance will be matched by a strong showing for the FTSE 100, according to Barcap, which expects the index to rise by about 18pc next year and offer a further 4pc return in dividends. The bank's hopes for the London market come from performance in the rest of the world, rather than the UK.

"The FTSE is a major play on global demand," said European equity strategist at Barcap in London. "You don't have to look very far to find exposure, whether directly through miners and food producers, or indirectly through the oil companies."

He pointed to miners including Rio Tinto and Xstrata, food producers such Unilever and oil companies such as Royal Dutch Shell. The FTSE closed on Thursday up 0.2% at 5,807.96.

David Cameron's coalition Government has pledged tax increases and spending cuts in an effort to eliminate a structural deficit estimated at £109bn. If the Government can begin to deliver on the promise then it should help both the currency and stock markets, Barcap predicts.

"The Coalition is enacting deep structural reform in order to take a lump out of the deficit, which is a risk, it could ultimately be good for the structural growth story in the UK."

Gerard Associates Ltd advises expats and people considering living abroad on the technical and currency options available for Pensions, QROPS, QNUPS and investments in a clear format allowing all customers to make an informed choice. Our service encompasses Pensions, investments, currency exchange and guidance on taxation in most popular ‘sunnier’ climates.   This with the re-assurance and security of UK authorised and regulated advice – essential tools for your security.